U.S. Steel (X) Announces Pricing of Senior Notes Due 2026

United States Steel CorporationX has declared the pricing of its $650 million total principal amount of 6.250% Senior Notes due 2026.

Per the company, the notes were issued at 100% of their face value. Interest is payable semi-annually in arrears per year on Mar 15 and Sep 15, starting Sep 15, 2018. The notes will mature on Mar 15, 2026, unless repurchased or redeemed earlier.

U.S. Steel plans to use its cash on hand along with the net proceeds from this offering to fund a tender offer to redeem all of its outstanding 8.375% senior secured notes due 2021 and the payment of fees and other expenses related to the offer.

Notably, U.S. Steel exited 2017 with cash and cash equivalents of $1,553 million, up roughly 2.5% year over year. Long-term debt decreased roughly 9.4% to $2,700 million while cash flow from operations for 2017 increased 9.7% to $802 million.

U.S. Steel’s shares have rallied 26.3% in the past three months, outperforming the industry’s 13% growth.

U.S. Steel recently updated its full-year 2018 guidance. For the year, the company now expects EBITDA of roughly $1.7 billion (revised up from roughly $1.5 billion), considering the potential market conditions resulting from the Section 232 actions and increased shipments from Granite City Works. It expects EBITDA to be roughly $250 million for the first quarter of 2018.

The company expects the impact of the Section 232 on market conditions to become clearer over the next several months, which could affect its results. Moreover, once the restarting process is completed, U.S. Steel expects roughly 100,000 tons of incremental shipments per month from Granite City Works. The company expects the benefits from these actions to be mainly reflected in its results in the second half of this year.

CF Industries has an expected long-term earnings growth rate of 8%. Its shares have rallied 22.8% over the last six months.

LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have gained 15.9% over the past six months.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have moved up 9.8% over the last six months.

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